1 June 2010
Progress Rail Services—a wholly-owned subsidiary of Caterpillar—has signed a definitive agreement to purchase Electro-Motive Diesel (EMD) for $820 million in cash from Berkshire Partners LLC and Greenbriar Equity Group LLC. Upon completion of the transaction, EMD will become a wholly-owned subsidiary of Progress Rail.
“This acquisition represents the latest step in our strategic plan to aggressively grow our presence in the global rail industry,” said Caterpillar. Starting with the 2006 acquisition of Progress Rail and including today’s announcement, Caterpillar has invested about $2 billion into its rail and transit businesses.
Founded in 1922, EMD is one of two US OE manufacturers of diesel-electric locomotives (the other being GE Transportation). Once the Electro-Motive Division of General Motors, the company was acquired in 2005 by Berkshire Partners and Greenbriar Equity and renamed Electro-Motive Diesel, Inc. EMD, headquartered in LaGrange, IL, with additional facilities in London, Ontario, and San Luis Potosi, Mexico, had revenues of $1.8 billion in 2009. The company has produced more than 70,000 engines and has the largest installed base of diesel-electric locomotives in the world.
Progress Rail Services is a provider of rail and transit products and services in North America, including: locomotive upgrade and repair, railcar remanufacturing, trackwork, rail welding, rail repair and replacement, signal design and installation, maintenance of way equipment, parts reclamation and recycling.
The acquisition is expected to close by the end of 2010, pending final regulatory approvals. EMD will remain headquartered in LaGrange, IL. John Hamilton will continue as president and CEO of EMD and will report to Billy Ainsworth.